Carillion knocked back over business plan as talks continue over future

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In November, Carillion reported full-year profit will be "materially" lower than expected after it experienced a combination of delays to disposals of certain public-private partnership deals, and a "slippage" in the start of a "significant" project in the Middle East in addition to lower-than-expected margin improvements across a "small" number of United Kingdom support services contracts.

Administrator firms PwC and EY were also reported to have been put on standby as talks about the firm's future carry on.

"The thousands of workers with Carillion and those in the supply chain servicing its contracts across the public sector will be desperately anxious about the future and they too need to be reassured by the Scottish Government as a matter of urgency".

In a statement, Carillion said: "Suggestions that Carillion's business plan has been rejected by stakeholders are incorrect".

The company added it was "focused" on "seeking to deliver an outcome that will ensure that the group emerges considerably strengthened and able to continue delivering excellent service to its many public and private sector customers".

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In September, "disappointing" half-year results saw Carillion sink to a pretax loss of GBP1.15 billion from a profit of GBP84 million the year prior amid further impairments.

It also maintains 50,000 homes for the Ministry of Defence, manages almost 900 schools and manages highways and prisons.

The government has said contingency plans are in place.

The shadow business secretary, Rebecca Long-Bailey, said: "The collapse of Carillion could provoke a serious crisis".

Gail Cartmail, Unite assistant general secretary, said Carillion's workforce was being "held hostage by the whims of the market".

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The company met with creditors including RBS and Santander UK on Wednesday to ask them to consider a debt extension or roll-over in financing talks and it is expected to talk with the Pension Regulator on Friday.

However, no announcement has been made on a business plan to secure its future.

The reported that David Lidington, who was moved to the Cabinet Office as part of Prime Minister Theresa May's reshuffle this week, convened the meeting with Business Secretary Greg Clark, new Justice Minister Rory Stewart, new Transport Minister Jo Johnson and Liz Truss, Chief Secretary to the Treasury.

"We are committed to maintaining a healthy supplier market and work closely with our key suppliers".

On Friday, Carillion's shares fell a further 29% to 14.20 pence, after a tough 2017 which saw its share price repeatedly hit by several profit warnings and other events.

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The company is a major supplier to the Westminster and Scottish Government and has contracts in the rail industry, education and NHS as well as being a key player in the consortium for Aberdeen's multimillion-pound city bypass.

The company has been working on a plan which it said "will provide the basis for the agreement of a proposal to restore Carillion's balance sheet".

The Pensions Regulator would not comment on whether it was attending specific meetings, but a spokesman said: "We have been and remain closely involved in discussions with Carillion and the trustees of the pension schemes as this situation has unfolded".

In a note to clients, Peel Hunt's analysts said: "We suspect that given its mounting liabilities, recent press comment, growing customer worries and supply chain hesitancy that Carillion will be forced (by the banks) to accelerate its financial restructuring".

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